Wednesday, 18 April 2012

Why moving home with a mortgage will cost more and take longer

Why do some mortgage companies
insist you go to one solicitor for your mortgage and a different one for your
purchase?

For many years one solicitor
would act for both you and the lender because in the main your respective
interests would be the similar. You both
wish to purchase a property without any adverse legal consequences. This is known as a “joint representation”
transaction.

The benefit of this is that
providing your solicitor was on the lender’s general panel one overall fee
would be charged.

However, some mortgage lenders in
response to increasing concerns with levels of mortgage fraud and poor
conveyancing practice have decided to limit the number of firms that can act on
their behalf.

This “separate representation”
approach means the lender will appoint a solicitor to act on their behalf and you
are able to instruct your own solicitor. Generally there is no restriction on which firm
you choose providing they are on the lender’s general conveyancing panel.

However there is one lender namely HSBC which
has through charging extra legal fees made it very difficult for you to exercise a
free choice.

If you are involved in a
transaction where you have two firms of solicitors acting this can often cause
delay because your solicitor will not be able to exchange contracts on your
behalf until the lender’s solicitor has confirmed approval.

The likelihood is that separate representation
is likely to figure more in the future with the consequence ofadding extra expense and time to thealready slow and stressful process of moving
home.